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This paper examines the long-run relationship between financial globalization and economic growth in sub-Saharan Africa using panel unit root tests, panel cointegration tests and panel multivariate ECM. The study finds that the variables are stationary at first difference - I(1). Also, the results reveal that all the variables are cointegrated, that is, they are related in the long run. The results of the ECT test within the framework of panel multivariate ECM confirm the cointegration tests. The paper concludes that there is a long-run relationship between financial globalization and economic growth in sub-Saharan Africa. The paper argues that sub-Saharan African economies will benefit from the era of financial globalization in the long run in as much as the governments promote and encourage sound macroeconomic policies and strong institutions. [ABSTRACT FROM AUTHOR]

This paper provides an empirical assessment of the driving forces behind structural transformation in sub-Saharan Africa, and to further access the role of structural reforms in accounting for cross-country differences in transformation. Evidence from this paper reveals that country specific fundamentals, institutions and policy reforms as well as governance and fiscal reforms are the key drivers of transformation in the region. A set of policy strategies is proposed to engender sustained transformation and development in the region. [ABSTRACT FROM AUTHOR]

The paper examines the dynamically evolving triangular relationships between institutions, growth and inequality in the process of economic development, in order to deepen the understanding of institutional conditions for pro-poor growth and shared growth. In this context, the paper discusses the institutional conditions found in sub-Saharan Africa, which may have produced the growth pattern that is unequal and against the poor. The analysis shows that sub-Saharan African countries require transforming institutions for embarking upon and sustaining a development path which would ensure shared growth in years to come. The paper first evaluates the growth-inequality-poverty nexus, as found in the recent literature, which increasingly challenges the trade-off between growth and equity, as postulated in the traditional theories. Various definitions of pro-poor growth are discussed and a sharper definition of the concept of ‘shared’ growth is provided. Definitions of institutions are then examined, as well as the triangular inter-relationships between institutions, inequality and poverty. The paper finally analyses specific institutional conditions found in sub-Saharan Africa that prevent economies from emerging out of low-equilibrium poverty traps that are characterized by low economic growth, unequal distribution of income and wealth as well as unequal access to resources and power. [ABSTRACT FROM AUTHOR]

Abstract: This paper explores the moderating effects of absorptive capacity on the role of technology transfer in explaining cross‐country differences in national efficiency. We used data from 18 sub‐Saharan Africa countries over the period 1970–2010 and adopted a stochastic frontier approach. The empirical results show that the coefficients of the interaction terms for measures of technology transfer (trade and machinery imports) and absorptive capacity (relative R&D) are negative and statistically significant. This suggests that absorptive capacity positively influences the degree to which technology transfer affects the efficiency of countries in sub‐Saharan Africa. [ABSTRACT FROM AUTHOR]

This paper explores the impact of the institutional environment on the performance of 291 microfinance institutions in 34 sub-Saharan Africa countries during the period 2006 to 2014, by analysing the unbalanced panel data using fixed effects and generalized method of moments (GMM) estimation techniques. The panel regression results demonstrate strong evidence that a strong institutional environment has a positive effect on the performance of microfinance institutions in sub-Saharan Africa. More specifically, the findings reveal a positive and significant relationship between business freedom and microfinance performance in sub-Saharan Africa. These vital findings not only provide useful information to policy makers and key microfinance industry players, but also highlight the impact that institutional qualities have on microfinance performance. [ABSTRACT FROM AUTHOR]

This paper argues that food security and human development are intricately linked, and that meaningful progress on the one cannot be sustained without concomitant progress on the other. The paper surveys recent research on various aspects of the linkages between food security and human development and highlights areas where further research would enrich our understanding of the complex interactions and synergies between the two. It concludes by calling for a more systematic investigation of the human development-food security nexus with a view to generating new and practical insights for improving food security and advancing human development in sub-Saharan Africa. [ABSTRACT FROM AUTHOR]

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Exercising fiscal prudence in periods of deteriorating fiscal balance requires sound policies which promote debt sustainability. This paper estimates a dynamic cross-country model and investigates the impact of domestic debt on economic growth and private sector credit in a panel of 21 sub-Saharan African (SSA) countries over the period 1985 to 2010. System-GMM results reveal a non-linear relationship between domestic debt and economic growth, characterized by a maximum turning point of 11.4 per cent of GDP. In addition, domestic debt is found to crowd out private sector credit by an elasticity of negative 0.3 per cent of GDP, deterring capital accumulation and private sector growth. These findings underscore the need for effective debt management strategies which incorporate debt ceiling to limit domestic indebtedness, as well as the design of financial policies which enhance credit availability, promote fiscal discipline and deepen domestic debt markets on the continent. [ABSTRACT FROM AUTHOR]

Abstract: This paper studies the role played by the quality of property rights in the linkages of international capital flows into sub‐Saharan African (SSA) economies. Using panel data of 36 SSA countries over the period 1996–2015 and the ARDL procedure with the Pooled Mean Group regression method appropriate for non‐stationary panel data estimation, we account for the joint effects of property rights quality and openness to foreign capital flows on economic growth. We uncover the existence of a property rights quality threshold beyond which property rights either amplifies the spillovers effects or attenuates the negative effect of capital flows on economic growth. For instance, it takes a level of property rights of at least 60 to have a positive long‐term impact of capital flows on economic growth in natural resource‐poor African countries. The quality of property rights matters more to obtain spillover effects of capital flows on growth in natural resource‐poor countries than in their peer natural resource‐rich countries. Finally, with regard to the countries' income levels, capital flows have significant long‐term spillovers effects on economic growth in advanced African economies than in their low‐income peers. [ABSTRACT FROM AUTHOR]

This paper uses the bias-corrected least-squares dummy variable (LSDV) estimator to examine the relationship between economic growth and four different types of private capital inflows (cross-border bank lending, foreign direct investment (FDI), bonds flows and portfolio equity flows) on a sample of 15 selected sub-Saharan African countries over the period 1980–2008. Our results show that FDI and cross-border bank lending exert a significant and positive impact on sub-Saharan Africa's growth, whereas portfolio equity flows and bonds flows have no growth impact. Our estimates suggest that a drop by 10 per cent in FDI inflows may lead to a 3 per cent decrease of income per capita growth in sub-Saharan Africa, and a 10 per cent decrease in cross-border bank lending may reduce growth by up to 1.5 per cent. Therefore, the global financial crisis is likely to have an important effect on sub-Saharan Africa's growth through the private capital inflows channel. [ABSTRACT FROM AUTHOR]

The paper conducts an empirical investigation into the effects of financial liberalization policies on the growth of 19 countries in sub-Saharan Africa (SSA). Two indexes are constructed which measure the gradual progression and institutional changes involved in financial liberalization. Because these indexes track specific financial liberalization policies, they provide better measures of financial liberalization than the indicators of financial development often used in the literature. Panel data estimates show a significant positive relationship between economic growth and financial liberalization policies. Our results are robust to alternative specifications of the model, and also across slow- and fast-growing countries. [ABSTRACT FROM AUTHOR]

In this paper it is argued that political development is the key to long-run growth in developing nations. Political development is seen to be dependent on the extent to which a state or ruling elite's income is earned or unearned. The availability of earned income is linked to the structure and productivity of the agricultural sector. Applying the analysis to the sub-Saharan African experience involves taking into account three factors: the international environment, the ethnic division of societies as a result of colonization, and the urban bias which characterized the economic strategy of the newly independent African states. As a result, agriculture collapsed, the ruling elite became increasingly dependent on unearned income, political underdevelopment occurred. The collapse of state authority significantly impoverished the region and resulted in significant civil conflict. Any long-run solution must incorporate a broad-based expansion in agricultural productivity. [ABSTRACT FROM AUTHOR]

To the extent that in utero and childhood malnutrition negatively affects later stage mental and physical health, it can possibly constrain later stage human capital acquisition, which is an important driver of economic growth. This paper considers the impact of famine on aggregate adolescent human capital formation in sub-Saharan Africa. We parameterize a joint adolescent human capital and food nutrition production function to estimate the effects of famine on years of primary school completed by individuals aged 15-19. Mixed fixed and random coefficient parameter estimates for 32 sub-Saharan African countries between 1980 and 2010 reveal that years of primary school completed by adolescents is proportional to the quantity of food and nutrition produced during childhood and in utero. This suggests that declines in food production and nutrition associated with famine in sub-Saharan Africa have large negative effects on the acquisition of human capital by adolescents and on long-run material living standards. Our findings show that there is yet another consequence to famine, a long-run reduction in adolescent human capital, and this should reinforce the case for strong food security programmes in sub-Saharan Africa. [ABSTRACT FROM AUTHOR]

This paper re-examines the long-run finance-growth nexus in sub-Saharan Africa (SSA) using data from 17 countries over the period 1975-2005. We apply error correction-based panel cointegration tests that take into account cross-sectional dependence among countries. Our results - unlike a previous study using the same data - indicate the existence of a long-run relationship between financial and economic development in SSA countries. Moreover, our results clearly show that the long-run causality runs from financial to economic development, although a muted support for the reverse causal impact is observed when financial development is measured by the percentage of liquid liabilities in GDP. The estimated long-run parameters measuring the finance-growth link are positive and statistically significant. Therefore, our results strongly support policies aimed at developing the financial sector in SSA in order to promote long-run economic development. [ABSTRACT FROM AUTHOR]

Investment is a crucial factor determining economic performance at the firm as well as the country level. In this paper I identify the determinants of the decision to invest in new plant and equipment as well as the determinants of the level of such investment for a sample of firms in 19 sub-Saharan African countries. In particular, I concentrate on the role of property rights, external finance, trade status and firm ownership on investment. Results indicate that internationally trading firms, foreign owned firms and firms with better access to sources of external finance tend to be more likely to invest and to invest more, with little role for indicators of property rights in influencing investment decisions found. [ABSTRACT FROM AUTHOR]

Most of the monetary policy frameworks which use a domestic anchor for monetary policy in sub-Saharan Africa (SSA) employ quantitative money targets. Although these frameworks proved useful in reducing inflation in SSA, they are not well suited to the discretionary fine tuning of monetary policy. Monetary policy frameworks should be reformed in the post-crisis period, especially in the 'frontier markets' of SSA, where the need for activist demand management will grow in line with economic development and the integration of domestic financial sectors into global markets. Reforms should include adopting a broader set of policy objectives in addition to inflation, replacing broad money as the intermediate target with a more sophisticated set of indicators and forecasts and reform of the operating target. In essence, central banks should introduce a form of inflation targeting lite. This should be complemented by measures to strengthen the transmission mechanism of monetary policy. [ABSTRACT FROM AUTHOR]

Migrant remittances reached $21 billion in sub-Saharan Africa (SSA) in 2008 according to the World Bank estimates. Despite these important flows, few macroeconomic studies have been conducted on this topic in SSA compared to other developing regions. The existing studies on the impact of remittances in SSA have been mostly in the form of case studies at the microeconomic level or reports. The objective of this study is to fill in this gap by investigating the impact of remittances on savings and investment in respective samples of 37 and 34 SSA countries over the period 1980-2004. It also analyzes comparatively the effectiveness of remittances and foreign aid in promoting savings and investment. OLS and instrumental variables (2SLS) with country fixed-effects are used as estimations methods. We find that both remittances and foreign aid positively and significantly influence savings and investment in SSA, meaning that contrary to most conclusions found in the literature, migrant remittances in SSA are not only and entirely spent in basic consumption needs. We also find that, although the volume and share of remittances are lower than foreign aid, remittances have more positive impact on savings and investment. Remittances, by being directly received by people in need and not by governments as intermediaries, would serve more households' interests and be more effective in favouring economic development than foreign aid. However, when efficiently used in a good institutional, political and economic environment, foreign aid can act as a complement to remittances by allowing vulnerable households to have income above the threshold subsistence's level so they (or migrants) can use a larger share of remittances for savings and investment purposes. Our results also suggest that remittances may have indirect positive effects on growth in SSA through savings and investment. [ABSTRACT FROM AUTHOR]

The article describes how the forces of globalization influence poverty in general. Six case studies from Sub-Saharan Africa (SSA) are discussed to examine the impact of globalization in the country. It was noted that although globalization has made some contribution to economic growth in SSA, it has not yet facilitated the process of structural transformation required for countries in SSA to reach the take-off stage and accelerate economic development and poverty reduction. The case studies illustrated that globalization instead has increased intra-country inequality and done very little to reduce poverty.

Abstract: Using cross‐sectional and panel data estimation techniques with various methods of volatility measures, we have found a significant negative impact of growth volatility on growth for 35 sub‐Saharan African countries from 1980 to 2013. When we consider the possible endogeneity of growth volatility, we obtained a more strong negative relationship. Decade by decade regression indicates a decline in the volatility effect over time for standard deviation based method. Nevertheless, volatility coefficient of one decade does not significantly vary from the other decade when we test for the equality of the coefficients. We further classified SSA countries into ‘resource rich’ and ‘resource non‐rich’ so as to observe if volatility varies by resource within the region. Although the latter groups seem to have a stronger negative relationship, it is the ‘resource rich’ countries which have a stronger negative relationship when endogeneity of growth volatility is taken into account. [ABSTRACT FROM AUTHOR]

Abstract: The linkages between international trade and economic performance has received significant attention from policymakers and researchers. There is consensus in the literature that improved trade openness corresponds to improved economic growth. In this study, we argue that trade openness has a significant impact on population health outcomes and financing. The study employed a balanced panel data for 42 sub‐Saharan African (SSA) countries over the period 1995–2013. Population health status was measured by total life expectancy at birth, infant mortality rate and under‐five mortality rate. Three main estimation models were used: (1) fixed effect (FE); (2) random effect (RE); and (3) the generalized method of moments (GMM) in estimating the relationships. The results showed that trade openness has a positive and significant effect on life expectancy, a negative and significant effect on the infant mortality rate and a negative impact of trade openness on the under‐five mortality rate. A positive effect of trade openness on health financing was also realized. The findings of the study support international trade integration and emphasize the need for countries to be conscious of gains from trade within sub‐sectors of the economy. [ABSTRACT FROM AUTHOR]

Sub-Saharan Africa (SSA) has been receiving foreign aid for many decades; nonetheless, it ranked among the poorest regions in the world. This study revisits the aid effectiveness debate quantitatively by investigating the relationship among foreign aid, governance and economic growth in SSA using more recent data from 1996 to 2012 and testing for heterogeneity in aid recipient countries. Fundamental questions raised in this study are: does aid work the same way in all regions and group of countries in SSA? Do governance and size of aid matter? Employing the system generalized methods of moments (system GMM) technique, results show that foreign aid has an insignificant negative relationship with economic growth in aggregate SSA. However, one cap does not fit all in SSA as heterogeneity across aid recipients has implications for aid effectiveness. Moreover, governance and size of aid complement each other to improve growth in SSA. This study has been able to show quantitatively that a general policy for countries in SSA is not good enough for aid effectiveness; donors should increase the size of aid, and governance in recipient countries must improve. In conclusion, heterogeneity, governance and size of aid matter for aid effectiveness in SSA. [ABSTRACT FROM AUTHOR]

In theory, private capital flows (PCF) augment domestic capital for economic growth. In sub-Saharan African (SSA) economies, foreign direct investment per capita (FDIC), portfolio investment per capita (PIC) and bank lending per capita (BLC) components of PCF grew inversely to gross domestic product per capita (GDPC). Previous studies have attributed this problem largely to recipient economies' structural features, with little attention paid to PCF shocks (sharp fluctuations from the equilibrium path). Employing annual data on 14 SSA countries from 1990 to 2013, this study estimated a neoclassical growth model to evaluate the effects of PCF shocks on the SSA countries' economic output and growth. The results showed that private capital flows positively affected economic output and growth, as hypothesized in theory. The effects of PCF shocks were negative, however, and are thus culpable for poor response of the region's economic performance to inflows of private capital. [ABSTRACT FROM AUTHOR]

This study explores the causal relationship among electricity consumption, economic growth and CO2 emissions for a group of 14 sub-Sahara African (SSA) countries from 1980 to 2009 using panel cointegration and panel vector error correction modelling methods. The findings demonstrate that in the long run electricity consumption has a statistically significant positive impact on CO2 emissions. The results also reveal that the inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis exists in the SSA countries' case. The panel causality tests indicate that there is short-run unidirectional causality running from economic growth to CO2 emissions and electricity consumption respectively. Simultaneously, there is long-run bidirectional causality between electricity consumption and economic growth, electricity consumption and CO2 emissions, economic growth and CO2 emissions. Depending on the results, relevant policies can be initiated without negatively affecting economic growth. [ABSTRACT FROM AUTHOR]

This study investigates empirically the direction of causality between financial development and economic growth in three sub-Saharan African countries — Kenya, South Africa and Tanzania. The study seeks to answer one critical question: Does financial development in sub-Saharan African countries exhibit a supply-leading or demand- following response? Using three proxies of financial development against real GDP per capita (a proxy for economic growth), the study finds that the direction of causality between financial development and economic growth is sensitive to the choice of measurement for financial development. In addition, the strength and clarity of the causality evidence is found to vary from country to country and over time. On balance, a demand-following response is found to be stronger in Kenya and South Africa, whilst in Tanzania a supply-leading response is found to be dominant. The study therefore recommends that for Kenya and South Africa the real sector of the economy should be developed further in order to sustain the development of the financial sector. However, for Tanzania, there is need for further development of the financial sector in order to make the economy more monetized. [ABSTRACT FROM AUTHOR]